Marco Vangelis. Essen%al Knowledge for Transi%on. knowledge > empowering > change

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1 Marco Vangelis. Essen%al Knowledge for Transi%on

2 Key Points The design of the money and banking system is directly implicated in all of the largest problems we face: Increasing levels of debt (public and private) Economic instability Concentra.on of wealth Loss of democracy and government corrup.on Environmental and climate disrup.on

3 Key Points Basic design of the money and banking system is accessible to all A widespread understanding of the money and banking system is necessary for a func.oning democracy The money and banking system is a private- public partnership (risk/rewards) Banks profit mo.ve leads to misuse of their awesome privilege Redesigning the money and banking system makes it possible to solve some of our largest societal problems

4 New Possibili.es: Rebuild our infrastructure Improve the educa.on system Improve health care and preven.on Climate adapta.on Environmental restora.on Rebuild the local food system infrastructure Repopulate rural areas and transi.on to organic agriculture

5 Why is Money Difficult to Understand? Overcoming Four Pa4erns of Thought: There is no free lunch Money is a posi.ve number Money is a creature of the na.on state Money is uniform

6 Money is Hierarchical Money is Hybrid (public/private) Central Bank A L Private Banks A L Private Sector A L Gold Currency Currency Deposits Deposits IOUs

7 Aggregate Balance Sheet Commercial Banks in US 8/12/15 (in $ billions) Assets Liabili.es Treasury Bonds, MBSs, CDOs and other securi.es $3,000 $15,400 Commercial loans $1,900 Real Estate Loans $3,800 Consumer loans $1,200 Other assets $2,400 Demand Deposits $9,100 Time Deposits $1,700 Other borrowed funds $1,800 Source: Federal Reserve H.8 Cash and Federal funds $3,100 Other Liabili.es $1,100 Equity Capital $1,700

8 Federal Reserve Balance Sheet 8/19/2015 (in $ billions) Assets Liabili.es Treasury Securi.es $2,450 Federal Fund Deposits $2,550 $ 4,500 Mortgage Backed Securi.es $1,750 Federal Reserve Notes Outstanding $1,400 Other Liabili.es $500 Other assets $300 Equity Capital $50 Source: Federal Reserve H.4.1

9 System Design Flaws and Solu.ons

10 What s Wrong with the System? All money is created as debt

11 How much money is created? US Treasury Federal Reserve About $40 billions (metal coins) About $4,000 billions ($2.5T reserves, $1.5T paper currency) Banks About $11,000 billions

12 What s Wrong with the System? All money is created as debt No money is created to repay the interest on the debt The private banking sector effec.vely has a monopoly on money crea.on Profit mo.ve leads to inappropriate money crea.on and alloca.on

13 Where did the banks directed the money they created? (UK 97-07) Source: Posi.ve Money Ins.tute, UK

14 What s Wrong with the System? All money is created as debt No money is created to repay the interest on the debt The private banking sector effec.vely has a monopoly on money crea.on Profit mo.ve leads to inappropriate money crea.on and alloca.on The debt- based money system is in the process of collapsing

15 Now..Towards a solu.on Public Private Public Private US Treasury US Treasury Federal Reserve Federal Reserve Banking Sector Banking Sector

16 Now..Towards a solu.on Debt- free Debt- free US Treasury US Treasury Debt- based Federal Reserve Debt- based Federal Reserve Banking Sector Banking Sector

17 Banking Sector - Now JP Morgan Chase Bank of America City Group Wells Fargo

18 Banking Sector Towards a Solu.on Public Bank (new RFC) JPM BoA Ci. Wells Fargo Public Bank

19 What if money crea.on and credit alloca.on was directed to the common good?

20 Alloca.on of money and credit US Treasury Federal Reserve Banks Funding basic social needs (sufficient to cover legacy interests) Funding the natural commons Funding infrastructure projects Support SME lending Funding produc.ve economic ac.vi.es not financial specula.on or RE bubbles!

21 Poten.al: Rebuild our infrastructure Improve the educa.on system Improve health care and preven.on Climate adapta.on Environmental restora.on Rebuild the local food system infrastructure Repopulate rural areas and transi.on to organic agriculture

22 If governments do not shape money, they are shaped by it. Prof. Jem Bendell

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24 Marco VangelisG Essen.al Knowledge for Transi.on Website: ek4t.com Contact: FB:

25 Massive expansion in the B/S of the Fed ( ) Treasury Bonds $2450 B Total Value US Farmland $2400 B T- Bills Other $750 B Mortgage- backed securi.es Other $1750 B $300 B Total US Student Debt $1100 B

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